MIDLAND – It’s finally official. After a week of news leaks, Michigan’s Dow Chemical Co. and Delaware’s DuPont Co. will merge in a deal valued at $130 billion.
The merger of the two chemical giants will combine products from both Dow and DuPont in agriculture, commodities chemicals and specialty chemicals to create the new businesses – created amid pressure from activist shareholders who wanted greater value.
Dow is a major player in Michigan, particularly in Midland where it is by far that city’s dominant economic force, its largest employer and a major supporter of cultural and charitable services. Both companies also have substantial operations supplying Detroit automakers with coatings and other materials.
Dow also announced it would take full ownership of Dow Corning, its 50-50 joint venture with Corning Inc. The maker of silicone materials is based in Auburn in Bay County.
Dow and DuPont will combine in an all-stock deal, they said Friday in a joint statement. Dow Chief Executive Officer Andrew Liveris, 61, will become executive chairman. DuPont CEO Ed Breen, 59, will be CEO of the new company.
The combined company will be headquartered in Dow’s current base in Midland and DuPont’s in Wilmington, Del. The companies did not specify potential job cuts but said they expect to achieve $3 billion in cost savings within two years of the deal’s closing.
The new company would be named DowDuPont and represents a “merger of equals,” the companies said in a morning news release. They say they expect the deal to close by the end of 2016, and the subsequent split of the company into three parts 18 to 24 months after that.
“This transaction is a game-changer for our industry and reflects the culmination of a vision we have had for more than a decade to bring together these two powerful innovation and material science leaders,” Liveris said in the statement.
